YouTube Attempts to Compete With TikTok Through ‘Shorts’

YouTube offers creators greater opportunities for making money, in apparent competition with TikTok.

The Google-owned company announced at Tuesday’s “Made on YouTube” event that it’s lowering the bar for creators to make money on the platform by introducing revenue-sharing to Shorts, its TikTok-like video-sharing service where videos can be up to 60 seconds long. YouTube announced that Shorts creators will receive 45% of all revenue earned by ads playing between videos. This is expected to happen in the early 2023.

“Short video is clearly a really popular format. So it feels like every platform is kind of moving in the same direction,” says Mark Bergen, the author of Like, Comment, Subscribe: Inside YouTube’s Chaotic Rise to World Domination.

YouTube reportedly first announced these changes internally during an all-hands staff meeting on Sept. 15, with vice president of product management and creator products Amjad Hanif citing the development as “the largest expansion” that YouTube’s monetization program has undergone in several years. Experts in tech say this seems to suggest that YouTube wants to keep creator loyalty, as TikTok’s popularity grows quickly.

YouTube, for its part, says that YouTube has had a long-term goal to offer a short-form content monetization option. “The announcements we made today are first-of-its kind and establish a new model for the due and critical compensation for mobile-first, short-form video creators,” a YouTube spokesperson says. “This is a huge area of investment for us, and we look forward to seeing how it helps the community thrive and grow.”

Learn more Why YouTube and TikTok stars want to sell you a shirt (and maybe a hamburger)

TikTok is in the forefront

YouTube has more than two billion users per month and is by far the best online streaming service. But TikTok’s popularity is becoming more and more clear. TikTok’s average monthly active users increased by 234% in the second quarter of 2022 compared to the same time period in 2019, while YouTube’s grew by only 29%, according to data from app metrics platform Sensor Tower.

“What TikTok has done is sort of take YouTube’s recommendation system and Facebook’s feed features that have been criticized for prioritizing engagement and addiction, and ball it all up into a really compelling service,” Bergen says.

TikTok also has a solid foothold with Gen Z users. According to a Pew Research study, YouTube remains the top social media site among U.S teens. However, TikTok continues to gain popularity. The survey showed that 95% of U.S. teens use YouTube and 19% are on the platform “almost constantly” as compared to the 67% who use TikTok and 16% who use it “almost constantly.”

Next in the ranking are Snapchat and Instagram, where 62% of teens say they use them, and 59% respectively.

“TikTok is the platform of choice for young people,” says Margaret O’Mara, a historian of the tech industry. “And that’s the growth market that all of these platforms have been chasing.”

YouTube’s strategy echoes recent updates that Facebook and Instagram parent Meta has made to its platforms to compete with TikTok. Instagram has marketed Reels as its solution to TikTok ever since 2020 when it launched the feature. The company has had a few setbacks as it tries to grow the service. Wall Street JournalAn earlier report this month stated that Instagram users spent less than one-tenth the amount of time on Reels per day, according to Meta research. This is compared with how TikTok users spend their Reels each day.

The following is an extract from the JournalPart of this problem is because Instagram has had difficulty recruiting people to create content. YouTube appears to have this exact problem and is trying to avoid it.

Lowering the bar for creators to earn money on the platform is a significant move that reflects how the ecosystem of social media influencers has grown and changed, says O’Mara.

“Even ten years ago, this whole world was different and YouTube could, in a way, act like an old Hollywood movie studio and have a stable of stars that it nurtured and showcased,” she says. “Now, the new creators who seem to be getting a lot of attention and a lot of traction very quickly are on TikTok. YouTube wants to be appealing to that set of creators.”

What YouTube’s announcement means for creators

Previous to YouTube creators could only make money if their subscribers had more than 1,000 and that they were able to show the videos for at least 4,000 times. Creators who have 1,000 subscribers or more than 10 million views of their Shorts videos in the last 90 days are now eligible to cash in on their content.

During Tuesday’s event, YouTube vice president of Americas Tara Walpert Levy said the company wants YouTube to be a “one-stop shop” for creators. “Our belief is that you should be able to make a living in any format,” she said.

TikTok has introduced competition to YouTube in a way it’s never really experienced, says Bergen. “That’s forced YouTube to pay more attention and give resources to creators in a way that it hasn’t before,” he says.

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